FRAK ETF seeks to capitalize on unconventional oil boom

Seeking to tap into investor enthusiasm for booming unconventional oil and gas production, Van Eck has launched a new exchange traded fund under the catchy symbol of FRAK, the abbreviated term for hydraulic fracturing used to extract fossil fuel from the world’s shale fields.

With an 8.5% weighting in the new ETF, Occidental Petroleum Corp.
ranks as the largest component of the 43-stock Market Vectors Unconventional Oil & Gas ETF
. Other big holdings in the ETF include Canadian Natural Resources
, EOG Resources
, Devon Energy
, Hess Corp.
and Chesapeake Energy Corp.
.

The ETF comes as improved extraction technologies are helping to increase global supplies of fossil fuels, and as overseas players seek to invest in energy fields in the U.S. and Canada.

While oil and gas production from these companies continues to ramp up, plenty of merger and acquisition activity is expected in the sector. So while the new ETF promises to tap into the fortunes of independent energy producers, speculation remains high on Wall Street for merger deals at lofty prices that could provide even bigger return for investors.

Instead of FRAK, maybe the ETF should have been called MERG or DEAL.

– Steve Gelsi

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